Social Media

2011's Biggest Winners and Losers in Ecommerce

In-demand products, unparalleled site design and usability, competitive search engine marketing, continuous innovative, exciting holiday specials — these are just some of the variables that make up a successful ecommerce business.

On the other hand, some of the top pitfalls for Internet retailers include lousy service, uninventive products, confusing corporate messaging and ineffective advertising.

We've seen a little bit of everything in 2011. As the year wraps up, it's the perfect time to recount the ecommerce wins and fails of 2011. Some strong houses continue to dominate this year, while previously lauded companies fell a bit from grace (cough, Netflix).

Let's take a look at the winners and losers in online commerce for 2011.

Though it has been met with criticism (and a software update to appease frustrated customers), Amazon's Kindle Fire tablet is the retailer's bestselling item ever, having only launched three months ago.

It's not just the devices that are making waves in the market. Kindle books are a big deal for the company too. As of April, Kindle electronic books began outselling physical books on Amazon. For every 100 print books Amazon has sold, it has sold 105 Kindle books.

But one can't overlook the fact that BN.com and the house of Nook are severely impeded by the retail stores' extreme losses. Although I'd like to declare Barnes and Noble a winner this year for its feats in the tablet and ereader markets, I just can't bring myself to reward mediocrity.

3. Winner: Apple

Apple introduced the iPad 2 and the iPhone 4S this year, basking in the glory of a full-fledged hype mill at each launch.

The iPad 2 helped drive sales of the iPad to 40 million units, since the original was introduced.

After the failed HP TouchPad launch, the company is now out of the tablet business, but hopes to be back in the game by 2013. I'm sorry, that's just sad.

5. Winner: Walmart

In August, Mashable's Christina Warren declared Walmart's recently purchased online movie service Vudu a "bonafide hit." For the first half of 2011, Vudu had 5.3% of the U.S. market, putting it in third place after behemoth iTunes and Microsoft's Zune Video Marketplace. Vudu even eclipsed Sony PlayStation Store and Amazon.

The retail giant is trying its hand at Facebook giving this holiday season, divvying up $1.5 million of holiday grants via the world's largest social network with its 12 Days of Giving campaign.

And speaking of social media, Walmart's social media strategy is top-notch when compared to other large retailers. It provides on-message, utility-focused videos on YouTube and showcases a team of 15 specialized tweeters via its Twitter channel.

And while we all love to dote on Amazon, Walmart is still the largest retailer in the world by a long shot, if you count offline business; and it ranks in the top 10 for online retail.

Walmart still needs to work on diversifying its online audience, though — a recent comScore report illustrated that 83.4% of Walmart.com's visitors came from North America in June.

6. Loser: Netflix

Much of 2011 went quite well for Netflix, but all hell broke loose after the company implemented its 60% price hike in September. Shortly thereafter, CEO Reed Hastings apologized and announced that the company would be splitting its streaming video and DVD business, rebranding the DVD-by-mail service as Qwikster. Of course, Qwikster sounded like a stupid idea to everyone in the community, so that idea was qwikly abandoned in October.

Hopefully for Netflix this huge snafu will be forgotten in the new year — but that's unlikely.

7. Winner: Gilt Groupe

Although it was only founded in 2007 and focuses solely on ecommerce, Gilt Groupe ranks in the top 50 Internet retailers, beating out household names like J. Crew, Scholastic, Crate and Barrel and American Eagle Outfitters.

8. Loser: Sony

This year was difficult for electronics and entertainment giant Sony. The company is forecasting a $1.1 billion full-year loss, which would make its fourth straight annual net loss. So, what's going on?

For starters, the strengthening yen, the unfortunate and lengthy PlayStation Network hacking affair, and declining LCD TV sales put the company in a bad place. Besides these more predictable problems, Sony also faced two natural disasters that hit its business badly, including floods in Thailand and the Japanese earthquake.

Sony, like its competitors, is facing difficulties adjusting to the ever-changing consumer electronics sector, and this year counts as another addition to its losing streak.

Your Thoughts

This post outlines some of the most buzzed about ecommerce stories of 2011. I could get into the nitty gritty of other companies — after all, there are hundreds of other Internet retailers out there in the green and red. But I'd rather get your thoughts on the industry.

Mashable
is a global, multi-platform media and entertainment company. Powered by its own proprietary technology, Mashable is the go-to source for tech, digital culture and entertainment content for its dedicated and influential audience around the globe.